David Neeleman, the founder of JetBlue Airways and a pioneer in low-cost airlines, has gone to Brazil to start another new carrier. Neeleman's new venture will be called by a name he will choose from entries to its website, voceescolhe, which translated means "you choose".
Neeleman enters a tough market, with a huge domestic low-fares presence in the form of Gol. The Brazilian market also has TAM, a domestic and international powerhouse, and has been plagued by frequent starts-ups and failures. For example, Gol's new unit VRG, which is the former Varig, is dropping its entire long-haul international network only a few months after its launch.
Earlier this year VRG dropped Frankfurt, London and Rome. In April it announced its flights to Mexico and Madrid will end May and its flights to Paris will end in June. That will leave VRG with no transatlantic service and no flights outside South America - the carrier earlier shelved plans to launch Miami. VRG will instead focus on connectivity throughout Latin America.
Neeleman, who helped develop WestJet and Morris Air before founding JetBlue, says he has raised $150 million to finance the new Brazilian carrier. In late March he announced a deal with Embraer for up to 40 E-195s with 118 seats each - fewer seats than the narrowbodies flown by Gol and TAM.
The new carrier will start sometime next year with three of the Brazilian-built planes, using the huge metropolis of Sao Paulo as a base. Within his first year, Neeleman plans to have 10 aircraft and 36 within three year. By 2013, he could have about 60 of the Embraers.
"We respect TAM and GOL as well-run companies with deep pockets," says Neeleman. "We believe, however, that the Brazilian market is ready for a third major airline and that there is sufficient untapped potential to support all of us." His backers include Weston Presidio, the San Francisco-based investment company and Brazilian investors.